How Can Telcos Boost Revenues In Saudi Arabia

by Buana Sari Digital Marketer

Saudi Arabia stands at the crossroads of tradition and innovation, where ancient cultures blend seamlessly with cutting-edge technologies. In this dynamic landscape, the telecommunications sector plays a pivotal role in shaping the nation's digital future. The Saudi telecommunications market is expected to grow at a compound annual growth rate (CAGR) of 5.2% from 2023 to 2028, as reported by Mordor Intelligence.

Recent years have witnessed remarkable growth and transformation in Saudi Arabia's telecom sector. With a population of over 34 million people and a rapidly increasing number of mobile phone users, the demand for telecommunication services is surging. This surge extends beyond voice communication, encompassing data services, making Saudi Arabia one of the most digitally connected nations in the Middle East. In 2023, the number of mobile phone subscriptions in Saudi Arabia is expected to reach 127.21 per 100 inhabitants, according to data from The World Bank. Furthermore, 5G availability in Saudi Arabia reached an impressive 35.2% in 2023, ranking second in the region after Kuwait.

The Saudi Arabian government has set ambitious targets for the telecom industry, aiming to attain 80 percent 5G coverage by 2025. It has actively launched initiatives to accelerate digital transformation and expand broadband infrastructure. Regulatory bodies like the Communications and Information Technology Commission (CITC) play a crucial role in ensuring fair competition and safeguarding consumer interests.

At the forefront of Saudi Arabia's telecommunications sector are key players such as Saudi Telecom Company (STC), Etihad Etisalat (Mobily), Zain, Virgin Mobile, and Lebara. These top telecom companies in Saudi Arabia have made significant investments in infrastructure and are committed to driving innovation, revolutionizing how Saudis connect, communicate, and access digital services.

However, alongside the immense opportunities, the sector faces its fair share of challenges. Meeting the escalating demands of tech-savvy consumers, addressing cybersecurity and data privacy concerns, and driving revenue generation are among the top priorities for telcos in this highly competitive landscape.

The article explores the specific challenges facing Saudi telcos in revenue generation and delves into strategies that can empower them to thrive in this rapidly evolving market.

1. Embracing Digital Transformation

Saudi Arabia's telecom industry is in the midst of a major digital makeover. This change is happening because more people want mobile data and better internet services, and new technologies are being used. For Saudi telecom brands to succeed in the future, they need to embrace this digital change.

The Saudi government is actively supporting this digital shift. They have a plan called the National Digital Transformation Program, which aims to make Saudi Arabia a global digital leader by 2030. This plan includes many steps to improve digital infrastructure, get more people using digital technologies, and train workers to use digital tools. The government is also giving money to businesses that invest in digital transformation and offering training to help them do it.

All these efforts are starting to show results. Saudi Arabia's digital infrastructure is getting better, and more people are using digital tech. This digital wave is giving telecom companies a chance to generate more revenues.

The big players in Saudi Arabia's telecom industry are already making big moves. Saudi Telecom Company (STC), the biggest telecom company in the country, is spending a lot on 5G technology and cloud computing. 5G is the next-gen mobile network, promising super-fast speeds and almost no delay. This can unlock new services like virtual reality and augmented reality. Cloud computing helps STC store and work with data more efficiently, which makes customers happier and saves money.

Mobily, the second-largest telecom company, is working on new Internet of Things (IoT) solutions. IoT means that devices like machines, cars, and even fridges are connected to the internet. They share data, and this data can help businesses run better and make better decisions.

One exciting solution for Saudi telecom operators is the moLotus mobile video customer interaction platform. It works on all mobiles, no matter what type they are, and you don't need an app or data plan to use it. Operating on GSM technology, this tool reaches directly to mobile handsets, regardless of model or the need for a dedicated mobile application or data plans. moLotus empowers telcos to deliver immersive media content, including videos and personalized messages, ushering in an era of customer engagement that transcends convention. This transformative technology not only transforms customer interactions but also opens up new revenue avenues for telcos.

One compelling example of moLotus's prowess is its ability to automate and revamp various business processes, including payment and service reminders, loyalty programs, contract renewals, lead generation, and customer onboarding. Seamlessly integrating with telcos' operational frameworks, moLotus automates and digitizes them, delighting customers and enhancing both top-line and bottom-line performance, all at considerably lowered operational costs. This convergence of technology and innovation is charting a new trajectory for Saudi Arabian telcos, one that promises unprecedented revenue generation and sustainable growth in the digital age.

All these digital changes are opening up a new world of possibilities for Saudi telecom companies. They can make more money and grow sustainably in this digital age.

2. Leveraging Mobile Advertising Opportunities

Mobile advertising is gaining momentum in Saudi Arabia, offering a lucrative opportunity for telecom operators to boost their revenues. The widespread adoption of smartphones in the country has significantly expanded the potential reach of mobile advertising, making Saudi Arabia one of the most attractive markets for advertisers in the Middle East.

In fact, it's projected that mobile ad spend in Saudi Arabia will reach an impressive US$1,053.3 million by 2023, growing at a robust compound annual growth rate (CAGR) of 8.2% from 2022. This growth is being primarily driven by the increasing prevalence of smartphones and mobile data services. Saudi Arabia boasts a young and tech-savvy population, most of whom use smartphones for internet access and social media engagement. This demographic shift has created a sizable and ever-expanding audience for mobile advertising.

Within the Saudi Arabian mobile ad market, numerous players are vying for a share of the ad spend pie. Notably, Google stands as the dominant force, offering a diverse range of ad formats, including search, display, and video ads. Right behind Google, Facebook takes its place as the second-largest player, providing various ad formats, such as display, native, and video ads.

To capitalize on this booming mobile advertising landscape, telecom operators in Saudi Arabia are strategically partnering with leading advertising platforms. These strategic collaborations enable telcos to leverage their extensive subscriber base and join forces with advertising platforms to seamlessly deliver targeted and captivating ads directly to mobile users. Such partnerships not only enhance customer engagement but also drive substantial ad revenue growth.

Saudi Arabia's largest telecommunications company, STC, has forged a partnership with Google to launch STC Ads, a mobile advertising platform. This platform empowers businesses to reach a vast audience of mobile users in Saudi Arabia.

Mobily, the second-largest telecom operator in Saudi Arabia, has collaborated with Facebook to introduce Mobily Ads, a mobile advertising platform. Mobily Ads facilitates businesses in reaching a substantial mobile user base in Saudi Arabia.

Zain, the third-largest telecom operator in Saudi Arabia, has entered into a partnership with Twitter to unveil Zain Ads, a mobile advertising platform. Zain Ads enables businesses to engage with a broad audience of mobile users in Saudi Arabia.

Amidst this thriving mobile advertising ecosystem, moLotus, a cutting-edge platform, emerges as a revolutionary solution for telecom marketing strategies in Saudi Arabia. Seamless integration with moLotus empowers telcos to engage subscribers by delivering personalized multimedia content directly to their mobile handsets, regardless of the phone model, data plans or app availability. This innovation unlocks new dimensions of customer interaction, enabling telcos not only to generate revenue through advertising but also to enhance customer loyalty and brand perception.

moLotus offers advanced targeting, analytics, and campaign management tools, enabling telcos to fine-tune their Saudi Arabia advertising strategies and maximize revenue generation. By utilizing moLotus, telecom operators in Saudi Arabia can deliver immersive media content, including personalized videos and messages, directly to subscribers' mobile inboxes. The technology transcends traditional advertising by fostering engaging customer interactions, thus creating lucrative revenue opportunities for telecom operators.

3. Subscriber Data Monetization

The value of subscriber data has soared for telecom operators in Saudi Arabia, opening up strategic avenues for generating additional revenue streams. By capitalizing on the insights gleaned from subscriber behaviors and preferences, telcos can offer precise advertising, personalized services, and valuable insights to advertisers and businesses.

Projections indicate that total telecom revenue from subscriber data monetization in Saudi Arabia is set to reach a substantial USD 1.3 billion by 2025, marking a significant compound annual growth rate (CAGR) of 12.5% from 2022. This surge in subscriber data monetization can be attributed to the escalating adoption of mobile data services and the surging demand for personalized and precisely targeted advertising. Anticipated figures suggest that the number of mobile subscribers will reach an impressive 48.5 million by 2025, with each subscriber expected to use an average of 10GB of data per month.

Revolutionary tools like moLotus harness the potential of telecom subscriber data to craft tailor-made, engaging, and automated rich media campaigns. This data, brimming with invaluable insights, serves multiple purposes, enhancing revenue streams and guiding informed decision-making. Presented in a simplified format for efficiency, it fuels mobile advertising and streamlines customer processes through moLotus, leading to an elevation in Average Revenue Per User (ARPU) and more refined strategic approaches. Furthermore, this anonymized data can be shared with advertisers, enabling precise campaign tailoring for their target audiences. Telcos can thus transform this data into a revenue stream while safeguarding customer privacy.

In addition to subscriber data monetization, advanced analytics tools play a pivotal role in the telecom sector's revenue-generation efforts. Google Analytics, for instance, empowers telecom businesses to meticulously track user actions and collect invaluable user data. This wealth of information offers deep insights into user behaviors and demographics. Through astute data analysis, telcos can provide advertisers with specific audience segments tailor-made for targeted campaigns. This not only augments value for advertisers but also translates into increased revenue for telcos.

Moreover, Facebook Audience Insights furnishes telcos with the means to scrutinize user data stemming from interactions with Facebook's digital assets. This data serves as the foundation for crafting comprehensive customer profiles, facilitating telcos in segmenting their subscriber base for astute data monetization. Armed with this wealth of insights, advertisers can then design precisely targeted campaigns that not only enhance engagement but also translate into revenues for telcos.

4. Enhancing Customer Communication

The Saudi telecom sector is experiencing a paradigm shift in customer interaction, with personalized experiences taking center stage. Telcos operating in the Kingdom are increasingly acknowledging the importance of tailoring experiences to align with individual preferences and needs. Personalized campaigns have emerged as a potent tool to engage telco customers due to their inherent relevance to individual interests. A notable trend is the adoption of moLotus mobile advertising campaigns, which are meticulously personalized, down to the customer's name and address, offering a highly effective means of customer engagement and revenue generation.

In this evolving landscape, Saudi mobile operators are actively shifting their strategies towards sending customized recommendations and exclusive deals directly to their customers. This approach not only garners immediate attention but also elicits swift responses. To achieve this, telcos are harnessing their vast reservoirs of customer data, harnessing the power of Artificial Intelligence (AI), and employing sophisticated algorithms. The result is the creation of highly personalized advertising campaigns, facilitated by moLotus, which resonate deeply with individual preferences and interests, ultimately leading to increased engagement rates and, consequently, higher revenues.

In this era, telcos have outgrown conventional reliance on emails and social media platforms. They have embraced advanced technologies and platforms that facilitate seamless and effective brand-customer interactions. At the forefront of this transformation is moLotus, which has revolutionized the way telcos engage and captivate their subscribers. This technology empowers telcos to communicate their offerings through highly interactive moLotus campaigns, resulting in a substantial upsurge in conversions and sales revenues.

Telco marketers are now crafting engaging and profitable advertising campaigns through moLotus, equipped with user-friendly response options like URL Click, mgram, USSD, SMS, Call, and more. Furthermore, moLotus enhances visual communication by offering a diverse range of rich media formats, including videos, brochures, greetings, slideshows, and showcases. Telcos can seamlessly integrate product images, voice-overs, music, and various elements, enabling them to create captivating storyboards and impactful mobile videos, all within a concise timeframe of up to 40 seconds. This innovative approach has ushered in a new era of customer engagement for Saudi telecom operators, elevating their revenue generation capabilities to unprecedented heights.

5. Enhancing Consumer Revenues

Consumer revenues are pivotal for telecom operators in Saudi Arabia. As the industry undergoes constant evolution, telecom companies in the Kingdom are diligently strategizing to augment consumer revenues. This drive is not only vital for business expansion but also for ensuring the resilience of telcos in a fiercely competitive market.

The average revenue per user (ARPU) in Saudi Arabia's telecom market is projected to reach USD 21.5 by 2023, reflecting a compound annual growth rate (CAGR) of 2.5% since 2022. This growth surge is attributed to the surging adoption of mobile services and escalating demand for value-added services. The upward trajectory of ARPU in Saudi Arabia is anticipated to persist in the upcoming years, with the market expected to reach USD 23.5 by 2025.

The Saudi Arabian telecommunications arena is marked by intense competition, with four major players vying relentlessly for customers. This competitive landscape can exert a downward influence on ARPU. The rise of over-the-top (OTT) services like WhatsApp and Netflix, which offer similar features to telcos' services but often at lower costs, poses a considerable challenge. This intensifies the competitive struggle, potentially leading to diminishing ARPU. The Saudi Arabian telecom market features relatively low mobile service prices, attributable to both market competition and government price regulation. These lower prices can render it challenging for telcos to generate sufficient consumer revenues to cover operational costs and secure profitability.

To counter these challenges and boost consumer revenues, telcos are adopting a multi-faceted approach. Telcos are diversifying their service portfolios by introducing value-added services, such as mobile banking and mobile payments. These services not only generate additional revenue streams but also offset the decline in ARPU from traditional voice and data services.

Embracing breakthrough technologies like moLotus enables telcos to offer innovative services that attract new customers and enhance ARPU. With moLotus's hyper-personalization capabilities, telcos can tailor their offerings based on individual usage patterns and preferences, ultimately improving customer satisfaction and loyalty.

Telcos can efficiently target specific market segments, such as small and medium businesses, enterprises, or high-end users, via moLotus ad campaigns. By charging premium prices for tailored services, they can elevate ARPU significantly. Telcos can implement moLotus upselling and cross-selling campaigns to existing customers, generating additional revenue from each customer.

As consumer preferences evolve, telecom operators in Saudi Arabia will continue to explore innovative approaches to bolster consumer revenues and sustain their competitive position in the market.

Conclusion

In the ever-evolving landscape of Saudi Arabia's telecommunications industry, proactive measures are imperative. Telcos are strongly encouraged to implement the strategies outlined here: embracing digital transformation, capitalizing on mobile advertising opportunities, and enhancing customer engagement. Through strategic collaborations, the harnessing of subscriber data, and forging mutually beneficial partnerships with technologies like moLotus, telcos can access new high-margin revenue streams.

Saudi Arabia's telecommunications market stands on the brink of remarkable growth. By embracing these strategic initiatives, telcos can not only deal with challenges but also place themselves for perpetual revenue expansion. The potential for elevating ARPU, monetizing subscriber data, and enhancing customer engagement is substantial. The time is ripe to seize the significant revenue opportunities that await.